State auditor visits Fairfield to learn about effects of Medicaid privatization

FAIRFIELD – Iowa State Auditor Rob Sand visited Fairfield Wednesday morning, Sept. 25, to learn how Medicaid privatization is affecting local patients and health care providers.

A group of more than a dozen people greeted Sand at the Jefferson County ISU Extension and Outreach office. Each person was someone with direct knowledge of Medicaid either because they were a Medicaid patient or dealt with Medicaid patients through their business. Jefferson County Supervisor Dee Sandquist organized the meeting, which was attended by Iowa House of Representatives members Jeff Shipley (R-Fairfield) and Joe Mitchell (R-Mt. Pleasant).

In 2016, the state of Iowa privatized its Medicaid program, moving it from a government program to one managed by private health care providers that are reimbursed by the state. At the time it began, there were four managed care organizations in the state, but two of them have since withdrawn, leaving Medicaid patients with only two MCOs: Amerigroup and Iowa Total Care.

Sand began his remarks by saying he knows people have strong opinions on whether privatized Medicaid has been a success. One of the main reasons former Iowa Gov. Terry Branstad implemented privatization was to save money. According to the Associated Press, when Branstad changed the system that oversees health care for 600,000 low-income and disabled Iowans, he projected it would save $232 million. During an audit completed in 2018, former state auditor Mary Mosiman estimated that privatized Medicaid saved the state $126 million.

Sand, a Democrat, defeated Mosiman, a Republican, in the 2018 election. Sand said he wanted to find out the ways in which Medicaid was working – or not working – from the health care patients and professionals in the room. He wanted to find out if Medicaid was more efficient now, or if the apparent cost savings were disguising cost transfers from the state onto patients or health care providers.

Rhonda Robinson

The first person to speak was Fairfield resident Rhonda Robinson, whose 25-year-old son has been on Medicaid most of his life since he was born with an intellectual disability.

Robinson talked about problems she's had with Medicaid since its privatization, such as being transferred to three different MCOs, each with their own guidelines to follow. Among the most troubling things that she spoke of dealt with a letter she received in January 2018 from the state of Iowa informing her that her son was being transferred to Medicare as a supplement to his Medicaid. He received his Medicare card in February of that year.

Later, Robinson learned that her son had actually been transferred to Medicare months prior in April 2017, without her knowledge or consent. She said this caused a problem for her health care providers because none of them would have known to submit a payment to Medicare for her son's appointments.

Robinson's son was also having a problem with his medications. Each insurance carrier either refused to cover his medications or limited the quantity, going against doctors' orders. Robinson thought that perhaps she could solve the problem by opting out of Medicare and going back to just Medicaid, but the state Department of Human Services told her it was not possible to opt out of only Medicare. Robinson told Sand that her son was hospitalized last year as a result of his medications being changed and limited.

'I am trying to pay out of pocket for some of the medication, but others I can't afford,” she said. 'I was told during the process of appeals, since he had Medicare, that now he was a federal problem, not a state problem. He is not a problem! He is my son, he was born this way, and he didn't ask for this.”

Sandy Stever, Jefferson and Van Buren counties mental health coordinator, spoke on behalf of one of her patients, who joined her at the table. Stever said her patient has massive wounds on her foot, has been interviewed by an MCO case manager, and yet has not received services for close to three months. Stever said that her patient does not have a provider identified to treat her foot to this day.

'I'm in this business, and I don't get it,” Stever said.

Health care providers

Tracy Liptak is the regional clinical director of Optimae Behavioral Health Services, a company that provides health care and services to those with disabilities and mental illness. She said dealing with MCOs has been a challenge. She estimated that her company is owed $1.1 million in outstanding payments that the MCOs were behind in paying. She said claims take several more weeks to be paid than before. Claims that took 10-15 days before privatization now take 60-90 days.

Sand asked Liptak if she had to open a line of credit to pay her bills because of the delay in reimbursement.

'Oh yes,” she said. 'We've had to do that to maintain day-to-day functioning.”

Liptak said privatization has brought a huge increase in administrative costs, and that more of her time is spent filing paperwork related to audits and appeals, instead of focusing on patients.

Mindy Cooksey, who was there representing Fairfield Universal Therapy, said her company has been trying to get a contract with one of the MCOs, Amerigroup, since May, and has not received it. She said she doesn't understand why it is taking so long.

Larry Peach, the chief financial officer for the Jefferson County Health Center, said the other active MCO, Iowa Total Care, does not use the universally recognized medical codes that indicate the type of disease of affliction a patient has. This has caused a problem for the health center's clearinghouse, which does not recognize ITC's unique medical codes and is consequently slow in authorizing reimbursement to the health center. Sand said he found that incredible.

Peach said both ITC and Amerigroup are slow in approving physicians' credentials. He gave an example of a surgeon whom the health center hired July 1, and for whom it had submitted credentials to the MCOs in June. Peach said the MCOs still have not processed the paperwork and that the surgeon is not able to bill Medicaid. Peach said the health center will likely have to reschedule a surgery as a result.

Peach also spoke about how, despite Medicaid MCOs accounting for only 16-18 percent of payers, the health center spends most of its administrative time on MCO paperwork.

Medicaid patients

Gary Roth, who owns a dental practice in Fairfield, said he takes Medicaid patients because he feels a calling to do so. He said he's the only dentist he knows of who takes Medicaid patients either in Jefferson County or surrounding counties. As a result, people from all over have flocked to his office. He finally had to limit the number of Medicaid patients he could see in a month because the reimbursement rate is so low it is difficult to run his business.

At state dental conventions, Roth encourages other dentists to take on their fair share of Medicaid patients so that the responsibility doesn't fall on just a few firms.

'For those young dentists who are just starting out, they can't be reimbursed $40 for an hour-long filling. They'll go broke,” Roth said.

Roger Goedken is the executive director of Successful Living in Iowa City. He said MCOs report that 'internal glitches” are responsible for their delays in payment. Goedken doesn't feel that anyone is being held accountable for those delays. That said, he does feel that his claims are being approved in a more timely manner than a couple years ago.

He said that his company, just like Liptak's, has had to increase its line of credit to make payroll.

'Our administrative costs are way up,” he said.

Sand asked the health care providers in the room if any of them had been paid interest when their claim was paid late. None of them reported receiving interest.